Frequently Asked Questions

How can a community foundation help its community beyond making grants?

Who invests the foundation's money?

How are these investment experts chosen?

To whom is the community foundation accountable?

Do I need a lawyer to talk to the foundation?

How would I use the community foundation?

What is the difference between the United Way and my community foundation?

How long does it take to establish a fund?

Must all gifts be cash?

What is a community foundation?

A community foundation is a tax-exempt, independent, publicly supported, philanthropic organization established for the long-term benefit of a defined geographic area. It also encourages and distributes non-permanent philanthropic funds.

Who runs a community foundation?

A community foundation is run by an independent governing body representing the broad interests of the community with members of the board serving limited terms. The board is responsible for seeing that a reasonable rate of return is achieved on all funds entrusted to the foundation along with a few other obligations.

How does the foundation get its funds?

A community foundation actively seeks contributions from a wide range of donors and foundations and provides assistance to those donors in fulfilling their philanthropic interests.

Who receives grants from a community foundation?

The unrestricted funds of the foundation are awarded in a competitive process to non-profit agencies in the community. These agencies must be qualified 501(c)(3) organizations.

How can a community foundation help its community beyond making grants?

As our community foundation grows, we aspire to provide leadership on community issues by serving as a facilitator, convener, or mediator around significant community discussions. Additionally, we can serve as a fiscal sponsor by offering our legal and tax-exempt status to groups engaged in activities related to the organization’s missions.

Who invests the foundation's money?

The foundation hires professional management for its portfolio investment. Our current investors are Steven Hample and Lauren Peck from Hample & Peck Financial Planning and Investments. The foundation establishes the philosophy and policies for investments, but the professionals handle day-to-day decisions.

How are these investment experts chosen?

The community foundation has a finance committee which determines the investment experts.

To whom is the community foundation accountable?

A community foundation files an annual return with the IRS, which is a publicly available document. In addition, most states require a state information return, which is also publicly available. The foundation is primarily accountable to the people of the area it serves and publishes an annual report that is available to all.

Do I need a lawyer to talk to the foundation?

The fund agreements that establish donor-named funds in the foundation are made available to each donor during preliminary conversations with foundation staff. It is always recommended that the donors’ individual counselors review charitable gift plans.

How would I use the community foundation?

A family may choose to establish a named fund that bears their family name and continues their community giving in perpetuity. A community group may decide to establish a fund in honor of, or memory of, a friend or community leader. A business may choose a community foundation to help with its grant making, thus saving time and personnel for the business, yet assuring support for their selected charitable interests. Some donors choose to make their community philanthropy anonymous and the foundation is a perfect partner to help them. Nonprofit agencies often establish their endowments within a community foundation to guarantee their endowment donors that the principal of the gift is never disturbed and the earnings will forever come to the agency.

What is the difference between the United Way and my community foundation?

A United Way does a great job of serving its member agencies, which are community health and human service organizations. It makes annual distribution for general operating support to these agencies based on its annual fund drive proceeds. The community foundation supports all areas of the community – arts and culture, education, health and human services, recreation and civic affairs – and has no members who are guaranteed annual gifts. It distributes earnings in a competitive grant making process, generally on a one-year only basis. The community foundation distributes only the earnings from its endowment and not all of the money that it holds. The community is well served to have both a United Way and a community foundation.

How long does it take to establish a fund?

It is a simple process involving a meeting with a representative of the foundation and the donor to review the fund agreement form and determine the donor’s desires and the most suitable way to accomplish them. Once the donor and other appropriate counselors of the donor approve the form, the initial contribution is made and the fund is established. Generally the fund needs to be approved and accepted by the board of the foundation at its next meeting.

Must all gifts be cash?

No. The foundation is able to accept gifts of appreciated securities (which are particularly advantageous to the donor), real property, or in some cases, personal property. The community foundation offers the maximum charitable deduction available for estate and gift planning opportunities. The foundation is generally able to provide information on giving techniques and assist donors to evaluate the most effective ways to accomplish their charitable goals.

Our Mission

Bozeman Area Community Foundation’s mission is to strengthen communities and inspire greater giving by
investing charitable assets for today and tomorrow; connecting donors with effective organizations, ideas, and causes that matter; and leading and collaborating on important public issues. Read more »